Israeli New Apartment Prices Revert to 2022 Levels Amid Market Stagnation
Translated & summarized from Ice by baba
New apartment prices in Israel have returned to late 2022 levels, reflecting market stagnation, according to the Central Bureau of Statistics. While 2024 saw price increases due to financing incentives, the market has since stabilized. A significant shift is the rise of government-subsidized apartments to 45% of the market, up from 20% four years ago. Despite this, the average apartment price has risen 40% in six years, though it has barely changed from January to September this year.
The story in 5 lines · by baba
- New apartment prices in Israel have reverted to levels seen in late 2022, indicating market stagnation.
- Government-subsidized apartments now constitute 45% of the market, up from 20% four years ago.
- The average price of an apartment in Israel has increased by approximately 40% over the past six years.
- From January to September this year, new apartment prices have risen by only 0.6%.
- Demand areas like Tel Aviv and the central region have experienced larger price drops.
New apartment prices in Israel have returned to levels last seen in late 2022, indicating a period of stagnation in the real estate market, according to data from the Central Bureau of Statistics (CBS). While prices saw an increase in 2024 due to financing incentives, the market has since stabilized, with recent months showing mixed results. Sales experienced a recovery in June and July, followed by a less robust August, though not a significant drop compared to the previous year. September, typically a slower month due to holidays, also saw weaker performance.
The CBS data reveals that the price index for new apartments in September 2024 was similar to that of November 2022. A key difference from four years ago, specifically around September-October 2020, is the significant increase in government-subsidized apartments. These subsidized units, often part of programs like "price for the buyer," constituted about 20% of the market then, compared to approximately 45% today. This shift means that subsidized sales now make up a larger portion of the market, reducing the volume of transactions in the free market.
Despite the current stagnation, the average price of an apartment in Israel has risen by about 40% over the last six years. The years 2021 and 2022 were particularly strong, with a slight upward trend also observed in 2024. The peak of government-subsidized sales, nearing 50% of all new apartment sales, occurred in August-September 2019. Since then, apartment prices have increased by just over 42%. In the two years leading up to that peak, apartment prices rose less than the inflation rate.
From January to September of the current year, new apartment prices have risen by a mere 0.6%, indicating minimal change. This slight increase is attributed to rising prices in some peripheral cities, while demand areas like Tel Aviv and the central region have seen more significant price drops. Even with financing incentives contributing to a decrease in housing prices this year, they have not fallen below the prices recorded in 2024, a year that saw a 7.7% increase in housing prices.
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